FCC Initiative to Stop “Cramming” Charges

“We must do whatever we can to protect consumers from being nickel and dimed,” said Federal Communications Commission Chairman Julius Genachowski at a June 20 event at the Center for American Progress. He announced new efforts to stop “cramming,” or illegally charging an unauthorized fee to a consumer’s monthly phone bill. “If you charge consumers unauthorized fees, you will be discovered, and you will be punished.”

Chairman Genachowski built on his Consumer Empowerment Agenda by highlighting new efforts to crack down on cramming. Cramming charges typically range from $1.99 to $19.99, and the FCC estimates that 15 million to 20 million American households receive crammed charges on their wire-line bills each year. Compounding the problem is the fact that only 1 out of 20 victims of cramming may be aware of cramming charges, according to an estimate from the Federal Trade Commission.

The cost “may be small for any unauthorized charge,” Genachowski said, “but it can add up to real money at a time when so many consumers are struggling.” He added, “It’s simply unacceptable.”

The FCC has begun a program to educate consumers and strengthen enforcement measures to crack down on cramming. Genachowski pointed out that the FCC Call Center and FCC.gov are effective resources for information, and a way to take action against cramming charges.

CAP Executive Vice President Sarah Rosen Wartell delivered opening remarks, highlighting the FCC’s usage of the Internet to reach out to potential victims of illegal service charges through tip sheets, workshops, and advisories. The usage of “21st century tools to inform consumers,” she said, allowed consumers “to better protect themselves.” She also noted that the FCC’s efforts to “empower and protect consumers” were timely given the “rising costs and diminishing wages” in the American economy.

“The empowerment of consumers is at the heart of the FCC,” Genachowski said. Cramming schemes detract from consumer confidence in communications services. To promote economic success in communications, Genachowski notes, consumer confidence must be strong: “There is a straight line between getting this right, and job creation and economic growth.”